German Gov’t Approves ‘Bundes-Chain’ to Combat Libra Cryptocurrency
The German government will approve its proposed blockchain strategy this September which reportedly blocks projects like Facebook’s Libra cryptocurrency.
Germany Readies Anti-Libra Response
According to Spiegel, Germany’s federal cabinet will approve its blockchain strategy announced back in June 2019.
While the move signals the country’s intent to be a part of the emerging global economy, the government-run ‘Bundes-chain’ might sound the latest death knell for Libra in Europe.
Thomas Heilmann of the center-right Christian Democratic Union (CDU) says Germany’s legislative coalition already has a standing agreement to prevent the operation of any “market-relevant private stablecoin.”
Commenting on the matter, Heilmann declared:
Up to now, the economy has done a great job in countering crises and inflation with measures taken by central banks. Once a digital currency provider dominates the market, it will be quite difficult for competitors.
Rather than Libra capturing the market in Germany, authorities appear to be in favor of creating a state-backed digital currency which will run on the Bundes-chain.
Part of Germany’s proposed blockchain strategy involves creating a framework for crypto startups in the country. As previously reported by Bitcoinist, Bitbond in May 2019, launched the first-ever regulated security token offering (STO) in Germany.
According to Heilmann, authorities in Germany are hoping that the blockchain strategy will help local crypto startups enjoy competitive advantages over their foreign counterparts.
There is, however, little information as to how a government-run Bundes-chain will incentivize private participants.
Europe Wants Nothing to do with Facebook’s Cryptocurrency
For crypto analyst, Alex Krüger, other countries may soon begin to copy Germany’s approach to the emerging cryptocurrency and blockchain technology industry.
Some more color on Germany's proposed blockchain strategy/legislation 👇https://t.co/IxrogqbDin
— Alex Krüger (@krugermacro) September 13, 2019
Germany is one of a growing list of nations making efforts to block Facebook’s Libra cryptocurrency.
On Friday (September 13, 2019), French Finance Minister Bruno Le Maire declared that the country will work towards blocking Libra in Europe.
Echoing sentiments similar to those espoused by Heilmann, Le Maire surmised that Libra constitutes a threat to the economic sovereignty of Europe.
In China, the central bank is accelerating efforts to launch the country’s digital yuan project. This move is also part of China’s plan to block Libra.
Meanwhile, the Libra Association is moving forward with its plans to launch the crypto project. The Association recently applied for a payment license with Swiss regulators.
How will a government-run Bundes-chain provide economically viable incentives for private participants? Let us know in the comments below.
Images via Shutterstock, Twitter @krugermacro